3 Startups Disrupting the Insurance Industry

Young entreprenuers discussing startup
Carroll Elger|
March 14, 2019

In our last blog post, 5 Technologies Disrupting the Insurance Industry, we established that disruptive technologies are rapidly changing the insurance industry landscape and that firms, especially large incumbents, must respond and innovate around disruption to survive and thrive.

Innovation is the natural and correct response to disruption. Innovation can be incremental, when a firm adopts pieces of new technology to keep current with trends, or disruptive, when a firm decides they themselves want to create disruption in their industry and get market share. Planning for innovation can be complex, and before you start you want to know the firms that are already being disruptive and how they’re pushing innovation in the industry. We have selected 3 “insurtech” startups in insurance, the newest players that are leading disruption, as examples of where innovation in insurance is headed and to give you an idea of what the landscape looks like for either partnership or direct involvement in industry disruption.

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Jones is an insurance startup backed by insurance incumbent Chubb Insurance. Jones is offering liability insurance to independent construction contractors and those that hire them, a growing market. Jones offers pay-as-you-go insurance to contractors that it claims is easy to set up for contractors, and flexible for employers to adapt the insurance to the job’s specifics or company policies. Employers can be sure that the insurance meets compliance beforehand reducing their liability, and contractors can be sure their insurance covers all of their needs without worry.

Jones’ insurance solution is disruptive because it’s a dedicated insurance type that is specialized for one growing segment, and is technology integrated. Jones is a new company that incumbents should consider partnerships with, given their established capabilities and client base. This type of partnership allows firms to stay consistent with disruption through a low-risk alliance with a young company operating independently.


Ethos is one of the most fascinating insurtech startups in the industry today. Ethos is a brand new startup aimed at an insurance segment that’s already felt some disruption, life insurance. Life insurance is getting less attention from consumers than ever and declining in popularity, and Ethos feels this is exactly the environment they want.

How are Ethos changing a declining segment? By making life insurance simpler than ever, thereby making it more attractive to an ever-busy population. Ethos’ entire application process is nearly all online, bypassing the meetings, phone calls, and pushy sales pitches of traditional life insurance agents. The application is surprisingly simple as well, a short questionnaire that’s made possible by integration of AI technology that uses a large customer database to make smart predictions.  

Ethos is a major disruptor that incumbent firms must keep up with to avoid large losses in revenue, market share, and brand loyalty. They are exactly the type of agile insurtech startup that will quickly pass by a large firm that isn’t actively innovating better business models for the future.

Oscar Health

Oscar Health isn’t exactly a “startup” anymore as it enters its 9th year of operation, but we’ve included it here as an example of what happens after insurtech startups get traction and continue to disrupt after their initial boom (they were named one of CNBC’s 50 most disruptive companies of 2018). Oscar was one of the first companies to realize that insurance was wildly over complicated for the average consumer, and that digital technology and the internet could greatly assist the process.

Oscar’s use of technology isn’t necessarily revolutionary, but it created disruption through a holistic embrace of technology as their business model. Oscar interacts with its customers almost entirely over the internet or the phone. They offer 24/7 medical assistance over the phone, and immediately offered a mobile app with broad functionality for customers. They have largely accomplished their goal of making remote insurance easier and more convenient than incumbents and even offer competitive pricing made possible by the reduced costs of using tech to facilitate customer interactions.

For large enterprises there is a lot to take away from these examples. Understanding what startups are capable of in the long term as evidenced by Oscar is essential for identifying potential disruptors early on. Knowing the capabilities of partnership startups like Jones allows enterprises to make informed decisions on how to adapt to disruption that’s already underway, limiting damage from disruption.

In the last entry of this series on disruption in insurance, we’ll be discussing how internal innovation, especially crowdsourcing, can enable corporations to adapt their business model to improve their innovation strategy, grow revenue and reduce costs in rapidly shifting markets.

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